Weyerhaeuser's third-quarter profit nearly tripled on hefty gains from the sale of its packaging business, but revenues tumbled 37 percent and the timber and wood company faces a battered housing market.

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Weyerhaeuser’s third-quarter profit nearly tripled on hefty gains from the sale of its packaging business, but revenues tumbled 37 percent and the timber and wood company faces a battered housing market.

Chief Executive Dan Fulton said Friday that the housing market’s woes were tougher than predicted, although he still believes in the market’s long-term potential.

“Clearly we’ve been dealing with a really tough market situation,” he said in a conference call following the results.

He also said the Federal Way company was less optimistic about a recovery in wood-product prices than it was even six to eight weeks ago.

Weyerhaeuser, which makes absorbent pulp, wood panels and grows trees on about 6 million acres, posted third-quarter net income of $280 million, or $1.33 a share, including $461 million in gains from the packaging divestiture. A year earlier, net income totaled $101 million, or 47 cents a share.

But before one-time items, the company posted a loss of $3 million, or 1 cent a share, and sales fell to $2.62 billion from $4.15 billion. Still, results beat estimates of analysts polled by Thomson Reuters, who had expected a wider loss of 6 cents a share on revenue of $2.56 billion.

Still, the company’s stock fell Friday, closing down 46 cents, or 1.2 percent, at $38.22.

The company expects fourth-quarter earnings in its timberlands business to decline from the third quarter, and losses in its homebuilding operations are expected to mount on continuing weakness in the housing market.

On top of such broader problems, operating losses in Weyerhaeuser’s wood-products business are expected to worsen as prices and volumes decline in the seasonally slower fourth quarter. Profit from sales of pulp, which is used to make tissues, towels and beverage containers, also is expected to fall in the fourth quarter, hurt by lower pulp prices.

“We expect housing-market conditions will remain difficult, and our businesses will continue to aggressively manage costs and inventory accordingly,” Fulton said in a statement.

Weyerhaeuser sold its packaging business to International Paper in August for $6 billion.